Nike Trades in a Consolidative Manner

Nike Inc. (NYSE: NKE) traded lower on Monday and Tuesday, after it hit resistance at the psychological zone of 100.00 last Thursday. Overall, the stock looks to be trading in a consolidative manner, within a descending triangle formation since June 5^th, and thus, we would consider the short-term outlook to be negative for now.

In order to start examining whether the stock could correct lower, we would like to see a decisive dip below the 93.40 level, which provided support on June 15^th and 26^th. Such a move would confirm a forthcoming lower low on both the 4-hour and daily charts and may initially pave the way towards the low of May 18^th, at around 89.70. If that level is not able to stop the slide either, then we may see extensions towards the 84 barrier, which acted as a strong support zone between April 7^th and May 14^th.

Shifting attention to our short-term momentum studies, we see that the RSI lies below 50 and points down, but the MACD has been running flat, near both its zero and trigger lines. Although the RSI detect negative speed, the MACD points to a flat momentum, which adds to our choice of waiting for a dip below 93.40 before we start examining the bearish case.

On the upside, a break above the round number of 100.00 could also signal the upside exit out of the triangle. This may initially pave the way towards the 102.25 zone, the break of which could set the stage for the stock’s all-time high, at 105.61. If the bulls are willing to drive Nike into unchartered territory, the next resistance to consider may be the psychological barrier of 110.00.

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